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tv   The Call  CNBC  March 18, 2010 11:00am-12:00pm EDT

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data. we'll look at the economy right now and figure out where it is heading. right, larry? >> good morning, trish. melissa francis is off and we'll talk with the ceo of excel and find out why he wants washington to leave him alone! as the fed fights to keep control small banks, we ask, which is a better investment opportunity? small ones or big ones? piggy bank ones or too big to fail ones? we are "the call" on cnbc. okay. we've got stocks trying to rally here as investors digest the key earning reports and also economic data. fedex a strong barometer and nike reporting earnings while the latest economic reports show, once again, inflation not seeming to be a problem here, all this as democrats say health care reform will save them $100 billion over ten years as they scramble to get enough votes to past. hey, you have to promise
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somethi something. >> at least $100 billion. >> we'll talk about that coming up. the dow up for the eighth straight session and a gain of 0.25. we have the s&p and on the flat line, you can see it was higher on the recession and the nasdaq trading up as we speak. pretty much the flat line, as well. we want to head over to bob pisani and he has the latest trading action. big day in terms of the earnings news coming up. >> get back down here, i want to see you again. important thing is, the market keeps advancing, folks. i know people saying it is overbought, but we keep going up and very important comments from fedex to nike. look what fedex said on their conference call. the economic recovery is broadening. that's the conference call. solid gdp growth near term and that is very positive overall. look where the growth is for fedex. they have good numbers but i'm talking about the package shipping. international priority the
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international volume up 18% and domestic volume up 1%. freight was very weak and trying to price some of their competitors out of business. weak side right here. fedex stock is a little weaker and also they said they're reinstating compensation incentives, packages that they have removed. but, folks, that is good news, they'll pay their people more. that will show up more money in people's pockets down the road. one analyst called it a gold medal quarter. i agree. these numbers terrific overall. the most important thing for nike is the futures. the future order book that they had and the numbers were really strong and retailers were calling up and saying we want more sneakers and revenues up 6.6%. we're finally starting to see it in the retailers but, again, same story. look at north american sales only up 1% and western europe up 1% and there's the growth. again, overseas. there's nike. we talk about 52-week highs. forget it, folks.
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that's an historic high for nike. how about the market advance? some overbought like the relative strength indicators out there. the largest number of highs in the s&p 500 in 12 years. that's what you want to watch, folks. you'll be in trouble when you get new highs falling down and the market keeps advancing. very narrow leadership. larry, we haven't seen it yet. as of now the advance decline is strong and new highs every day still keep hitting records. back to you. >> bob pisani. dow jones is rising every day and the transportation index is confirming it. that's called dow theory. how important is that? >> this is one of the oldest indicators that are out there. when the dow transports and the dow industrials hit new highs nearly simultaneously, that historically has always been a positive signal. >> thank you, robert pisani. let us move on. in addition to fedex a lot of oeconomic data to suggest. jobless claims for the third
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straight week and widen in the fourth quarter and i guess both are reflecting a better economy. consumer prices flat signifying no imminent threat of inflation and the index of leading indicators was up again. so, where does all that leave the economy now and down the road? joining us john, economist for moody's and chief economist at pagan and regal. tom, let's go to you first. what do you make of all these numbers? how fast, how strong, how durable? that's what i'm going for. >> in terms of the leading index. we saw it slow down a little bit and it's happened over the last couple months, not unexpected. the growth rate in the fourth quarter of last year, that 5.7% was unlikely to be sustained. we expected it to slow in the first half of this year and that's what we're seeing in the leading index right now. >> john, when you look out in the months ahead, what is your expectation. are we at growth or at risk for a double dip? >> see more growth.
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i remain worried about what might happen to housing during the peak spring selling season. we need to grow home sales this spring into the summer in order to avoid another downturn by home prices. if home prices have, indeed, stabilized, we're probably going to be surprised by the vigor of the u.s. economy during the second half. >> how realistic is it for us -- john, how realistic is it for us to expect that home prices might actually stabilize? >> well, this is a 50/50 chance. this there is, indeed, a risk they could move lower. we have gotten bad news on home sales for the month of january, pending home sales were weak. nevertheless, who knows. there could be enough of a firming or approved outlook for employee so that perspective home buyers begin to respond to near record levels of home affordability. >> let me ask you in a forecasters' sense. get all these numbers coming out, most coincidence. the treasury yield curve has
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steepened wide and positive in the history of the earth. corporate credit risk spreads getting narrower and narrower. we are getting a substantial rally in the corporate market even now. that rally continues. profits and quorperate cash flows look really good. quite apart from the obsession with housing which is 2% to 3% of gdp, what about the business sector and the profit and the fed's easy money. doesn't all this spell expansion recovery, no double dip? >> i think i would agree with you. we'll connect the dots. as economists we deal in accountability. a lot more dots you have to connect to the sustained expansion. not that we're expecting robust growth in the future, we're just expecting growth. that means the labor department is going to improve and i think one of the keys to the housing market, in fact, is that improvement in the labor market that we're expecting to occur in the spring of this year and that should help stabilize house
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prices and i don't expect the see the march upward from here but i do expect to see stabilization. >> john, what a question on this whole issue going forward. where, i don't know how to say this. the fed gets a pass on inflation. i guess that's where i'm going. the numbers came in today very flat. the dollar has been stronger. gold prices about $125 off the peak. let us assume no inflation pressures and let us assume the fed has won this round, john. does that mean the fed will stay ultraeasy, you know, forever and ever and keep pumping the money supply in? >> no, it does not. if we put together three separate months where payrolls grow by 100,000 jobs at least. we'll look at the fed's first move towards a normalization of monetary policy. >> when, three months? at three months john? >> yeah, that might be closer than we think. i think there is a good chance that pay roll's bottom for the
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cycle in february that going forward employment will grow for reasons other than the temporary hiring of census workers. >> regarding when you -- >> go ahead. larry said earlier about credit risks. that's very important. we expect the default rate on junk bonds will fall to 3.5% in december. ordinarily when that happens you have pretty strong readings, not only for business investment spending, but also for job's creation. >> just stay with us. such an important point. credit default risk is coming down. the junk bonds spread the gap is narrowing against treasuries. i mean, to me this said all this risk of a double dip and you hear these guys, i don't see it. >> you don't see it, but, but, but -- could it come from the fact that we're spending so much money. we look at the health care. the democrats not saying we're going to save $100 billion. let's talk about this in terms
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of real accounting. tom, what do you think? i mean, is this going to be more of a cost to our economy and to our system or more of a benefit? >> the deficits are certainly a concern, not a concern in the next one to two years, but in the next one to five years, absolutely. the reality is what we are going to be facing in terms of social security and medicare in terms of cost. higher taxes and raise the retirement age and cut spending and all those things are in the pipeline for the long term. >> john, does that concern you? when you look at the double dip scenario, are you worried about deficits? >> not really. what concerns me more than anything else. home prices bedwin to sink and homeowner's equity shrinks and this delays the realization of a peak for credit losses at financial institutions. if we can avoid that, we are going -- >> i was going to ask you, just stay with this theme. how about the tax hikes in this
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bill. they are raising tax hikes on businesses, individuals and on capital gains and on payrolls. in fact, the payroll tax increase will be open to capital gains. here's a question. looking down the road, how do taxes affect the future growth? maybe this is a false prosperity, tom higgins? maybe what we're going to get is people piling their income into this year to avoid the tax hikes but next year will be much weaker. 2011 can be weaker than 2010. what do you think of that scenario? >> i think it's reasonable given a lot of the fiscal stimulus is hitting in the first half of the year and second half more of a fiscal drag and then add tax hikes in 2011. there is that concern. i don't think it will result in the double dip. i think we see more sluggish economic growth. >> yeah, you could have 4% growth in 2010, possibly, but then drop to 2% in 2011. that, to me, is the big risk of the false prosperity. >> that's right, i would agree. >> a lot of long-term consequences there. our thanks to you both.
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>> you reminded me of that. the tax thing. >> i mean, the accounting for this is just outrageous and then, of course, they're saying it is going to add $100 billion. i don't know how you get to those figures. >> i love it when you talk like that. still ahead, president obama getting ready to sign the $17.5 billion job creation bill into law. we'll carry his speech live. the ceo of excel energy joins us to talk about what's impacting his sector right now in washington.
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welcome back to "the call." i want to bring your attention to trina solar. the company after the close yesterday announcing a 7.9 million share secondary offering. those of you with good memories will recall a month ago that they came out with a great fourth quarter result and record volumes and now the company is, well, raising money in the public markets to expand their factories and increase their research and development. this at a time when we're seeing demand from a very, very tough 2009 for solar. but trona solar getting slammed on a secondary offering that would dilute its stock by about 11%. trish? >> matt, thank you so much. utility ceo os and experts in new york at the 17th annual
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utility electric conference. the regulatory environment in washington. joining us on first interview we have richard kelly. welcome. great to see you, mr. kelly. >> thank you, good morning. >> talk to me about this regulatory environment in washington. is it too much for your industry right now? >> no. we need some kind of certainty. we're kind of struggling as to what is going to happen and what are they going to come up with, if anything, and how will it impact us and how do we react to it? not knowing is worse than anything. >> it's vague. that's sort of the problem here. >> right. i mean, i feel that there is going to be something, some kind of climate bill, energy bill whether it's this year or not if it's not at the federal level, it's at the state level. not knowing is the real problem we're facing. >> richard, are you getting squeezed by washington and, let's see, the state of colorado on your call plans? what are they doing to you down
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there? how much is that going to cost? >> well, you know, we're not being squeezed. what we're doing in colorado is look at our older coal plants and see if it makes sense to replace them with renewable energy or convert them to natural gas. that has nothing to do with what's going on in washington except the down side or the upside is, depending on how you look at it, it will help us meet our carbon goals. >> what kind of demand do you see in terms of the broad economy? electricity demand is a very big indicator of the economy. what are you seeing right now? >> it's starting to come back a little bit. we're looking at maybe 1% growth versus the normal 1.5% to 2%. it's coming back very slowly. >> what is this telling you about the economy? >> that it isn't, you know, it isn't rushing back. i mean, i keep thinking that it will come back in a big way like it did. electricity is usually a leading indicator of what is going on in the economy and coming back very slowly and probably telling me
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that businesses aren't wrapping up completely but they are starting to come back a little bit. >> talk to me about your business. are you expanding and hiring a little bit right now? >> no, we are not hiring, but we stay steady. our business is, you know, our sales are down but a number of employees we need to remain roughly the same and we still need to operate the same number of power plants and operate the service we need to. we're not hiring, but we're not laying off either. >> if cap and trade passed, mr. kelly, what would that mean to your business? >> to us, personally, at excel energy it would mean an increase, not as big an increase to us as to others. we are a long way down the road with our portfolio standard. our goal is to reach close to 30% renewable and it won't have quite a devastating effect on our customers as it might on some others. you're talking about a 5%, 6%, 7% if cap and trade would pass. >> all right, well, we'll leave it there. thank you very much, mr. richard
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kelly, excel, appreciate it. when we come back, president obama will sign the $17.6 billion job creation bill. that could happen any minute. i'm sure you're all waiting for it. head live to the white house to listen in on the president's speech about jobs and the economy.
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all right, president obama getting ready to sign the job creation bill into law any moment. you can see him gathering there. and he's got all his congressional leaders. i mean, look, the big fish here, trish, is going to be the vote in the house. >> good morning, everybody, please have a seat. >> here's mr. obama. no more commentarcommentary. >> please have a seat. on this beautiful morning we are here to mark the passage of a welcome piece of legislation for our fellow americans who are seeking work in this difficult economy. but, first, let me say a few words about the latest development in the debate over health insurance reform. i don't know if you guys have been hearing, but a big debate going on here. this morning a new analysis from the congressional budget office concludes that the reform we seek would bring $1.3 trillion in deficit reduction over the
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next two decades. that, that makes this legislation the most significant effort to reduce deficit since the balanced budget act in the 1990s. and this is, this is but one virtue of a reform that will bring new accountability to the insurance industry and greater economic security to all americans. so, i urge every member of congress to consider this as they prepare for their important vote this weekend. i want to welcome all the members of congress that are here, those that are on stage. adam speaker, majority leader reid, as well as some of my cabinet members who are here. in a few moments, i'll sign what is called the higher act. a job's bill that will encourage businesses to hire and help put americans back to work. and i'd like to say a few words about what this job's bill will
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mean for workers, for businesses and for america's economic recovery. there are a number of ways to look at an economic recovery. through the eyes of an economist, you look at the different stages of recovery. you look at whether an economy has begun to grow. and whether businesses have begun to hire temporary workers or increase the hours of existing workers. you look at whether businesses small and large have begun to hire full-time employees again. that's how economists measure a recovery. and by those measures, we are beginning to move in the right direction. but through the eyes of most americans, recovery is about something more fundamental. do i have a decent job? can i provide for my family? do i feel a sense of financial security? the great recession that we've just gone through took a terrible toll on the middle class and on our economy as a
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whole. for every one of the over 8 million people who lost their jobs in recent years, there's a story of struggle. of a family that's forced to choose between paying their electricity bill or the car insurance or the daughter's college tuition, weddings and vacations and retirements that have been postponed. so, here's the good news. a consensus is forming that partly because of the necessary and often unpopular measures we took over the past year our economy is now growing again. and we may soon be adding jobs instead of losing them. the job's bill i'm signing today is intended to help accelerate that process. i'm signing it, mindful that, as i've said before, the solution to our economic problems will not come from government alone. government can't create all the jobs we need to or can repair all the damage that's been done by this recession.
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but, what we can do is promote a strong, dynamic, private sector. the true engine of job creativity in our economy. we can help to provide for american businesses to start hiring again. we can nurture the conditions that can allow companies to succeed and to grow. that's exactly what this job's bill will help us do. now, make no mistake while this job's bill is absolutely necessary, it's by no means enough. there is a lot more we need to do to spur hiring in the private sector and bring about full economic recovery from helping credit worthy small businesses to get loans that they need to expand to offering incentives to make homes and businesses more energy efficient to investing in infrastructure so we can put americans to work doing the work that america needs done. nevertheless, this job's bill will make a difference in several important ways. first, we will forgive pay roll taxes for businesses that hire someone who's been out of work
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at least two months. that's a tax benefit that will apply to unemployed workers hired between last month and the end of this year. so, this tax cut says to employers, if you hire a worker who's unemployed, you won't have to pay pay roll taxes on that worker for the rest of the year. in businesses that move quickly to hire today will get a bigger tax credit than businesses that wait until later this year. this tax cut will be particularly helpful to small business owners. many of them are on the fence right now about whether to bring in that extra worker or two or whether they should hire anyone at all. in this job's bill should help make their decision that much easier. by the way, i'd like to note that part of what health insurance reform would do is to provide tax credits for over 4 million small businesses so they don't have to choose between hiring workers and offering coverage. the second thing this bill does is to encourage small businesses to grow and to hire by
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permitting them to write off investments they make in equipment this year. these kinds of expenses typically take years to depreciate, but under this law, businesses will be able to invest up to $250,000, let's say, in a piece of factory equipment and write it off right away. put simply, will give businesses an incentive to invest in their own future and to do it today. third, we'll reform municipal bonds to encourage job creation by expanding investment in schools and clean energy projects. say a town wants to put people to work rebuilding a crumbling elementary school or putting up wind turbines. this rule would make it easier for them to raise the money for what they want to do by using a model that we've called build america, one of the most successful programs in the recovery act. give americans a better chance to invest in the future of their communities and of the country. and, finally, this job's bill
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will maintain crucial investments in our roads and our bridges as we head into the spring and summer months when construction jobs are picking up. i want to commend all the members of congress and their leadership is what made this bill possible. many of them are here today. i'm also gratified that over a dozen republicans agreed that the need for this job's bill was urgent and that they were willing to break out of the partisan to take this forward step for the american people. i hope this is a prelude to further cooperation in the days and months to come as we continue to work on digging our way out of the recession and rebuilding the economy in a way that works for all americans, not just some americans. after all, the job's bill i am signing today and our broader efforts to achieve a recovery aren't about politics. they're not about democrat versus republican. this isn't a game that we're playing here. they're about the people in this country who are out of work and
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looking for a job and they're about all the americans of every race and region and age who have shared their stories with me over the last year. single mothers told me she filled out hundreds of job application and been on dozens of interviews but still hasn't found a job. the father whose son told me he started working when he was a teenager and recently found himself out of a job for the very first time in his life. the children that write to me and they're worried about their moms and their dads and worried about what the future holds for their families. that's who i am thinking about every morning when i enter the oval office. that's who i'm signing this bill for and who i will continue to fight for so long as i am president of the united states. so, with that, let me sign this bill and let's get to work. >> all right, so, there you heard president obama and we'll bring in john harwood in washington, d.c. john, good morning. i want to ask you about what i
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see is a big contradiction here. president obama is giving a temporary pay roll tax break for six months for new hires, but the health care bill is going to permanently increase the payroll tax rate and that, of course, extened caps, gains and dividends. why would a business person, small business or whatever knowing full well your payroll tax is going to go up permanently. why would they hire anybody in the short run? >> if pay roll taxes are going up permanently what difference would that make in hiring in the short run or not? >> the tax costs of hiring goes up. they're not fooled by the short-term credit, they're looking at the long-term. >> it's a case of whether you get the short-term credit or no credit. the tax rates are going to go up anyway if this health care bill passes on sunday, which i think it will. what they're trying to do in the job's package is provide a little incentive and i would be the first to say -- >> why do you want to take on additional liabilities at a time
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when you know you're paying higher taxes because of health taxes and why would you take it on for a six-month credit? >> presumably because you need the worker. >> if you need the worker, john, maybe that's true. the money we're spending on the short-term tax credit is being wiped out by the permanent increase in the future and business people have a higher term horizon than three, six months out to the end of the year. >> the only variably here is the medicare payroll tax increase is going to happen when health care passes. so, that's fixed. the only variable here is whether or not you need to hire somebody, want to hire somebody and you're not on the fence whether you're going to do it now or do it a little bit later. you might do it now for the credit, although i'd be the first to say this is probably a very marginal effect on anybody's hiring decision. >> this seems to favor people that have been completely out of
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work, no job. they have to swear, in writing, that they have not worked in the last two months. does it unfairly penalize people who really scrape together a few jobs over the last couple of months, freelance work, temporary work. and unfairly favor those that checked out for the last two months. >> well, i guess it depends on your view of people who have been out of work for two months. if you think they did it because they wanted to have a vacation, then maybe you would not like the fact that there is a credit for their hiring. but if your view is, and i think this is obama's view, that a lot of people are out of work and have been out of work for a long time because they can't find jobs and want to, they believe that it's kind of important to help people who have been out of work for a long time. >> it's never going to work. you can't cut taxes for a couple months and then raise them permanently and expect a permanent impact on jobs. to me, it makes no darn sense at all. >> i hear you, larry, but 68
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members disagreed with you. >> anyway, we have to move on. john harwood, thank you very much. coming up on power lunch christina romer first on cnbc to discuss the new job's law and the economic recovery. when we come back, some of the biggest names in banking gathering in washington, d.c., to meet with key lawmakers and regulators. tough times on the economy, spurring a war over water. it's main street biz with wendy. h
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welcome back to "the call." i'm trish regan. s&p trading up just slightly right now, however, the dow is in positive territory. the eighth day in a row that the dow has been in the green. we have investors reacting to the likes of nike, fedex and a slew of economic reports. the nasdaq, quick peek there. trading higher there. up barely two points, larry. the who's who of the banking industry. wall street power players all meeting in our nation's capital. hampton joins us from the summit with the look of the big topics on the subject. hi, hampton. >> hi, larry. basically 1,000 bankers wrapping up a two-day conference here in washington, d.c., understandably, most of the buzz in the hall and the meetings the reg reform bill and one of the things that they are concerned about that fdic sheila baird
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touched on when she spoke to the group a little earlier today is this whole idea of a single regulator. >> there has been some effort, obviously, in the senate to realign some of the supervisor's responsibilities who are opposed to the idea of the single regulator. we think maintaining the dual banking system is absolutely essential. >> now, the bankers have concerns about other key provisions, including, as we mentioned, who the regulators will be and the detail of the resolution authority process and they were encouraged when senate banking committee ranking member richard shelby told them he is opposed to separating consumer protection from safety and soundness. >> well, i believe that the prudential regulator that is the fed, the fdic, the comp troller and so forth should have some
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sort of coordination or say so in dealing with the consumer products. >> now, they also heard from stinny hoyer, the house majority leader who told them, number one, his word of warning, if you will, to the bankers assume that we, congress, will, in fact, get a bill done. so, if you're going to be lobbying, bring your a game and don't count on, in essence, some sort of reg reform not getting passed before the congress recesses this fall. larry? >> hampton, just a quickie. community bankers, we had them on our show, they don't like this consumer protection agency at all. what is the other buzz, though? what do they think when they hear steny hoyer say you're going to have a bill. do they want this bill and think they gain anything from it? >> they are engaged and they say they're encouraged more than ever. they hit the hill on mass every year, but they said, for instance, when they were up on the hill yesterday the great thing they like is for the most part they got face time with their representatives or with
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their senators, not senior staffers. they also say they're surprised at this point how knowledgeable a lot of the members are about the nitty-gritty. as you know, the details that will make or break reform if, in fact, we get a bill. >> thank you, hampton. appreciate it very much. hello, trish. >> hello, larry. as the fed fights to keep control of small banks, we're asking what is the better investment here. do you want to be in the big ones or the small ones? >> the small ones can actually fail. the war over h2o. making more consumers give bottle water and return to their taps. find out which companies are cashing in. return to their taps. holy cow. st to your company insurance. this is not how does it fit in my company's budget insurance. this is help protect and care for your employees at no cost to your company insurance. with aflac, your employees pay only for the coverage they want or need. and, the cost to you - nothing at all.
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teva beating out pfizer. germany is the world's second largest generics in the market. take a look at where teva is currently trading up 3%, a gain of almost 2 bucks. $61.86 a share. all right, more on the banks here. let's get the cnbc edge on whether you should be investing in the big banks or the regionals. we have matt mccormack a banking analyst and dan fits patrick.
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all right, i'll fill you guys in on a little tidbit. larry and i were talking about the discussion coming up. larry had a good point. find the bank you hate the most and buy it because there's no way you can't make money here, well, thanks to the euchre. so, let me ask you, you're not a huge fan of banks in general, tell me why larry is wrong. >> i think larry should have spoke at the banker's conference. but in terms of looking at bankses as a whole. >> what are you saying to me here? are you attacking me? what did you want me to say? i'm not a spokesman for the banks, what do you mean by that? >> i am saying you're always bullish on banks, larry. i understand about the steep yield that you and i will debate for a long period of time here. when i look at banks in terms of risks i'm not a big fan of banks and not a big fan of the
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smaller, regional banks. if i had to, i'd be on the larger side. fundamentals and they actually earned money versus the regional banks have lost and i think they have more diverse product lines and less relative exposure and i think they have a better fee-based environment which i think we'll be rising interest rate and i think they'll be better protected and finally the regional banks and smaller banks have been red hot in outperformance. the regional bank index in the s&p 500 up 30% year to date and up 14% in march. and i think just from a trading perspective, i don't think and i would look else where. >> so, just for the numbers. are the regionals outperformed the bigs? >> absolutely, absolutely. definitely outperformance. >> so, i'll stay because i think the fed is financing bank cash flows that's why i say find the bank you hate and just buy it. the issue between large and
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small, where do you come out on that? >> i think you have to find the bank that you love or everybody else loves and just buy that. no question that regionals, essentially, pose more risk than the big banks. but, larry, we get paid to take risks. if you want a real diversified portfolio, go ahead and buy bank of america and one stock you have the diversification. >> let me ask you a question on this, dan. a regional bank is not too big to fail. where as a big bank seems to be too big to fail. now, i have some hope that the dodd bill might be too big to fail. there's a debate about that whether they go to bankruptcy or not. i think at the moment, dan, i think with some clarity the big banks have an advantage in cost of fund that the regionals don't have. is that an issue in investing? >> yes, i think it is an issue that you have to understand. but, still, where there's risk, there's also potential reward and fortune favors those people or those investors who really, really focus on understanding
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the story. no question if all you're doing is talking themes, go for the big bankz. but if you want to zero in. look at zion and huntington bank shares and region financial. >> we might see some mna activity in the regional sector. >> that's right, trish. you think about it. look at the yield curve is steep and money is really cheap. banks aren't paying anything for banking, checking, saving market and the money is basically free and, again, if you're selective there could be a lot of sins hiding under those sheets. if you find the ones that the market is basically voting in favor of and that is buy strength, not weakness. if you do that, you'll wind up on the right side of the trend and you'll end up on the right side of the trade. >> i want to go back to matt, yes, large is better than small, but you're saying you just don't like this sector overall. and i didn't get a real clear sense from you as to why this is such a problem area. >> well, if you look at the
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environment, we can talk about the legal and regulatory risks. we can talk about looming cre exposure and you talk simply that a lot of these banks have had a great run and if you talk about bank of america that was up 302% from march 6 of last year through 2/31. you look at, and do you think trading you'll see it at $96 a year from now? i have to question the momentum and eventually the music will stop and if we see a rising interest rate environment, these stocks will get hurt. >> that's a big if. that's a big, massive if. >> if the curve narrows, that's the dangerous sign. just real quick, the producers are yelling at us. >> something new and different. if they do put trading limits, proprietary trading limits and other limits on the big banks, how bad will that hurt their revenues and how badly will it hurt their profits? >> it will hurt it for a little
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bit but bet on the ingenuity of wall street to beat the guys in d.c. any day, larry. >> thank you very much. coming up at the top of the hour, sue herera, what have you got? >> we have a terrific show, including several live events you need to watch here on cnbc. christina romer, of course, will talk to us about that job's bill that the president just signed and recovery and the cost of it. and then, of course, the health bill. we're all over that at 12:15 p.m. eastern time. a news conference. we'll take it to you live on capitol hill. the democrats holding that talking about the benefits of health care, but it is a vicious fight on the hill. we'll see whether or not the democrats come out on top. then, off the charts. a stock up 4,500% from a year ago. should you put new cash in there or not? we'll find out. trish, over to you. >> looking forward to it. when we come back, economic hard times over water.
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plus, coal heading into this afternoon's trading session. you don't want to miss that.
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welcome back to "the call."
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housing activity will rebound at a slower pace than previously expected, according to fannie mae economists. they point to a "surprising drop in new and existing home sales at the beginning of this year, but they view the setback as temporary. unemployment is still the big negative, but improved consumer spending is fueling optimism. the level of commercial and multi-family mortgage debt fell 1.7% in '04 and that is $99 billion less than the end of '08. that is the largest nominal drop ever recorded. blame it on zero activity in the market with no new mortgages coming in. home mortgage rates edged up ever so slightly to 4.96% last week for the 30-year fix. check back with the realty check back at 2:50 when we will have a special interview. until then, go to the blog. trish? >> we're looking forward to that. thank you, diana olick. many looking to trim
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expenses during the economic downturn tap water is the new bottled water and some small businesses are trying to cash in on this opportunity here. wendy is here with the main street business report. this is interesting. all kinds of gadgets with you here today. >> and you hit right on it. in the downturn people have begun to look at their taps in a new way. this is free water coming out of there and they are worried about the contaminants. pollution of drinking water is the number one concern among americans. you're seeing a lot of upstart companies as well as the britas really galther steam selling filtration products for the tap water. >> it is a lot cheaper. why spend all that money on bottled water when you're doing it yourself. >> we saw consumption of bottle water slip in 2009, meanwhile, projected sales 18% through 2013. big and small players gain in on this. >> what have you got to show us? >> everyone knows the pitcher filters, right? one of the next spots is
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portable filtration. this water bottle here has a filter built into a cap. costs about 16 bucks and replace the filters as you go. when you squeeze it it goes out through the filter. >> you put the water in there -- >> you squeeze it through there and removes chlorine and other possible contaminants. this is a pin, larry can take this out to a restaurant with him and swirl it in his tap water. chlorine removal on the go. >> the james bond of water. >> whip it out of your sleeve. >> you just swirl this in a glass of water and it's for a company called wellness. to remove chlorine. some people might be worried about health aspects and other people are worried about the taste. they don't like the taste of some of these things in their water. you see it for the pitchers and even see it in the shower now. again, companies like aqua sona, water wellness and they make a dehumidifier that pulls in water, filters it, you don't
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have to go into your pipes. >> is our government not doing a good enough job at regulating the water industry that we have to go to such lengths to get pure water? >> you raise an interesting point. the epa sets standards for 90 contaminants. >> why is water free? didn't you learn in college that there is no such thing as a free lunch. >> you do pay for water in some cases. >> a water stand when i was about 5 or 6 years old -- >> you sold that. >> i wanted to sell it and my dad said, no. >> if you filtered the water, you might have gotten a premium. >> i was ahead of my time. >> it's okay, i'm used to it. no problem. >> larry, we never ignore you. >> i got my little thing. we'll take a quick break and then we'll be back with this morning's market action. >> and the list of stocks to watch as we head into afternoon trading.
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all right.
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it's time for the call to action on stocks you need to watch. matt nesto is here with a look. hello, matt. >> hello, larry. check out the dollar strength versus the oil strength and weakness. goldman sachs on the conviction sell list today. we'll call this the head wind chart. look at the disparity between the performance, it is stark and pronounce and, thus, it gets the top billing enthis report. on the other side we have at least four key stocks that are popping on some pretty big profits here today. nike, fedex, gamestop and shoe carnival. yeah, don't write them off. what's interesting, three out of those four names are in the discretionary sector. i want to talk about palm. the stock is up huge ahead of its earnings due out. remember a month ago they warned and lowered their expectations for the fiscal third quarter and the stock is down 40% since then and, wow, what a year they have
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had. from 5 to 18 and back to 5 again. keep an eye on palm and you see buying ahead of news, if you will. also, the hmo index, all 11 numbers are trading higher. i'm calling it the ayes have it, i guess the market thinks so. you can debate that one all the way to sunday, if you want to. hmos look hot right here. lastly, take your pick of any of these banks, larry. they're all getting slammed here today. back to you. >> did you find the worst one there that you're going to buy? >> amazing after talking about that. strong dollar, low cpi, not a coincidence. >> that's it for "the call." i'm trish regan. >> i'm larry kudlow. "power lunch" up next. welcome, everybody, to "power lunch." can the bulls do it again. the dow pushing to take its streak now to eightco


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